Question 1

What is American Water Works Company, Inc's WACC?

Accepted Answer

American Water Works Company, Inc (AWK) has a Weighted Average Cost of Capital (WACC) of 5.75%. This is calculated using a Cost of Equity of 6.72% (via CAPM with a beta of 0.35) and a pre-tax Cost of Debt of 4.81%, with an equity weight of 66.79% in the capital structure.

Question 2

Is American Water Works Company, Inc's WACC high or low?

Accepted Answer

American Water Works Company, Inc's WACC of 5.75% is below the typical range of 8-12% for most companies, indicating relatively low cost of capital and lower risk. WACC is used as the discount rate in DCF valuations — a lower WACC results in higher present values of future cash flows.

Question 3

How is American Water Works Company, Inc's WACC calculated?

Accepted Answer

American Water Works Company, Inc's WACC is calculated using the formula: WACC = (E/V × Re) + (D/V × Rd × (1-T)). The Cost of Equity (Re) of 6.72% is derived from the CAPM model using a beta of 0.35. The pre-tax Cost of Debt (Rd) is 4.81%. The capital structure is 66.79% equity and 33.21% debt.

American Water Works Company, Inc (AWK) — WACC 分析

WACC 构成

解读

American Water Works Company, Inc（AWK）WACC：5.75%

WACC计算器

American Water Works Company, Inc（AWK） WACC 解读

AWK 公司分析

AWK DCF 估值

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